Australian PM in crisis talks with gas majors Australia faces...

• Australian PM in crisis talks with gas majors
• Australia faces gas shortage despite exports soaring
• Some companies call for domestic market gas reservation

(Recasts with fresh Turnbull comment, adds graphic)

Australian Prime Minister Malcolm Turnbull turned up the heat on Australia's top gas producers, led by ExxonMobil Corp and Royal Dutch Shell , on Wednesday ahead of crisis talks about a shortage in the domestic market.

Australia is on track to soon become the world's largest exporter of liquified natural gas (LNG), yet the country's energy market operator has warned of a domestic gas crunch from 2019 that could trigger industry supply cuts and broad power outages.

"It is not acceptable for Australia ... to not have enough gas for its own families and its own businesses," Turnbull told reporters in Canberra ahead of the talks with suppliers scheduled for later on Wednesday.

Turnbull added that gas companies operate "with the benefit of a social licence from the Australian people and they cannot expect to maintain that if, while billions of dollars of gas are being exported, Australians are left short."

Australia's power supply problems made international headlines last week when Tesla Inc boss Elon Musk offered to save South Australia, the country's most renewable-energy dependent state, from blackouts by installing large-scale battery storage.

The South Australian government on Tuesday outlined plans to spend A$510 million ($385 million) to keep the lights on, including A$150 million to encourage the development of 100 megawatts of battery storage, possibly from Musk or from local providers.

Australian manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts. Three LNG plants have opened in the country over the past two years, which has tripled gas demand and sent gas prices rocketing from around A$6 a gigajoule (GJ) to as much as $22/GJ.

Companies like top Australian steel maker BlueScope Steel (BSL), fertiliser maker Incitec Pivot (IPL) and packaging maker Orora Group (ORA) have urged the government to impose a gas reservation for the domestic market or risk losing thousands of jobs as plants shut.

Both sides of government have resisted a gas reservation, acknowledging that would create sovereign risk for existing projects and threaten future investments in the country.

Shell Australia, which runs the Queensland Curtis LNG plant and is sitting on undeveloped coal seam gas in the state, said it has sold significant volumes into southeastern Australia and would continue to do so.

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